The struggling ‘DeFi’ (decentralized finance) protocol named Iron Finance has announced that it is planning a relaunch incorporating a unique token following the crash of the previous one in the recent month. The declaration was stated through a blog post revealing that the firm schedules the launch on 12th July through the network named Polygon. The new token, along with the IronSwap, a stable swap service of Iron Finance, will be included in the relaunch.
The renewal of Iron Finance
In the mid of June, a token crash was faced by the partially collaborative stablecoin project based on Smart Chain of Binance. Then Iron Finance extracted the liquidity from the protocol, which resulted in a bank run.
The latest official token of Iron Finance named ICE the obsolete one TITAN. A hard cap will be imposed on the project, limiting it to 10B tokens which would be released during three years in the case of successful running of the project.
Some liquidity provision benefits will also be provided on the platform of IronSwap for Ethereum and the stablecoins. There will be allocated 4.5B ICE tokens for the liquidity incentives given on stablecoins through IRONv2, and as a compensation stock, the allocation of 2.9B ICE will be ensured.
The year of misfortune
A very uncertain year has been faced by Iron Finance. In March, $170,000 has been lost by the platform from the liquidity pools in its possession after some abrupt steps taken by the organizer group. The group took responsibility for the incident and affirmed that its smart contracts did not have any flaws.
In the middle of June, for another time, the panic was created for Iron Finance when some gigantic holders began trading their tokens, caused people to sell their TITAN by saving IRON.
A mechanism containing two-tokens has been introduced by the protocol, including a stablecoin IRON which is pegged to $1, and the other is TITAN, which is a collateral token. The mechanism was designed as such to tackle the ‘volatility of the market’ (due to shifts in the demand and supply of IRON).
Iron Finance elaborated that there occurred a loop of negative feedback because TITAN was manufactured in more quantity following the redemptions of IRON, and subsequently, the price went down continuously. It disclosed further that the situation is called a bank run.